Woolwich-RSU 1 rift remains

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WOOLWICH — A Maine Revenue Services representative told Woolwich selectmen on Monday that there was no mistake in state valuation figures used to calculate the town’s share of the Regional School Unit 1 budget.

With Woolwich slated to see a nearly 10 percent increase in its share of the RSU 1 budget next year, Board of Selectmen chairman David King said Wednesday that he’s still not satisfied with the town’s bill from the district, or that the legislation that created the school district is being followed correctly.

“The town of Woolwich is prepared to carry this as far as we need to carry this to get the law followed the way we feel it needs to and should be followed,” King said Wednesday.

When RSU 1 Superintendent Patrick Manuel on March 26 presented his proposed 2012-13 operating budget, Woolwich selectmen told board members that they suspected an error led to the 9.91 percent increase in the share of local revenue expected from their town.

Three of the other four communities in the district are slated to see far lower increases — Arrowsic at 5.45 percent, Bath at 1.52 percent and West Bath at .81 percent — and Phippsburg will book a 1.68 percent decrease in its share.

Specifically, selectmen questioned a one-year spike that increased the town’s valuation — one of several factors used to determine the town’s share of the budget — by $16 million one year and decreased it $14 million the next.

But on Monday, Mike Rogers, supervisor of municipal services for the Maine Revenue Services, told selectmen and school administrators that, due in part to a complicated business tax exemption (BETE) program, the valuation was correct.

“I’ve gone over the math three times and I haven’t found an error,” he said, describing the spike as an “aberration.”

According to Woolwich Town Administrator Lynette Eastman, Reed & Reed Construction purchased two large cranes in 2009 for approximately $3 million each, and through the BETE exemption, the company was not required to pay taxes on the equipment. However, the state of Maine still reimbursed the town for 90 percent of the taxes that would have been collected that year, and a lesser amount in subsequent years, so the value of the property was still figured into the town’s valuation.

Along with other factors — including a few high-priced property sales — that exemption led to what King described as “the perfect storm” for Woolwich in the RSU 1 costsharing breakdown.

While town officials on Wednesday acknowledged that the valuation figures are correct, they still object to shouldering what Eastman called “the lion’s share of the increases” in next year’s budget.

King said Wednesday that he thinks the board has relied on a faulty cost-sharing formula for the past five years.

RSU 1 was created in 2008 through legislation known as LD 910, prior to other school consolidation in the state.

A unique cost-sharing arrangement determines 12 percent of the local appropriation for the district’s budget through a cost-sharing formula that equally weighs property valuation, resident population and student population.

The state calculates the remainder of the local appropriation for RSU 1 as it does for other districts, according to Harkins, through property valuation and number of students.

Harkins, who was not on the RSU 1 board at the time, said that according to minutes of school board and budget meetings, soon after the district’s creation, the board sought a legal opinion on “vague” language in LD 910, in order to determine how to apply the one-third formula.

When two differing opinions emerged, the board voted to accept the interpretation of the law that suggested the district apply the one-third formula to the local appropriation, Harkins said Wednesday.

“The board publicly stated that this is how we are going to interpret LD 910 and apply the funding formula,” he said. “It was voted on and it was public knowledge, and we’ve been consistent in that application for five years.”

According to King, if RSU 1 followed the one-third formula for the entire budget, “ Woolwich would save $240,167 (next) year and the other towns would have to pick that up.”

He also said he doubts the legality of the board’s vote to adhere to that legal opinion.

“I’m not an attorney, but any funding decisions have to be made by the legislative body — a meeting of the residents of the five towns,” he said. “My contention at this point is they had no legal authority to make that decision.”

“When, where and how was it ever decided that the RSU didn’t have to abide by LD 910 when figuring the budget breakdown amongst the towns?” Eastman wrote in an email on Wednesday.

Harkins said he explained the board’s vote to Woolwich officials, and he intends to discuss it again, this time with representatives of the district’s five towns, at a special meeting of the RSU 1 board of directors scheduled for 5 p.m. Monday at Fisher- Mitchell School in Bath.

In the meantime, however, he said the board cannot delay the budget process, and will move forward with an eye toward a June 12 budget validation referendum in the district’s five communities.